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‘Oil firms flared $2.5b gas’


Oil producing companies  flared gas worth $2.5billion (N875billion) in the last one year, The Nation has learnt.

The firms include the International Oil Companies (IOCs), Independent Producers and the Nigerian Petroleum Development Company (NPDC).

Data from the Department of Petroleum Resources (DPR) revealed that the volume of gas that was not commercialised (flared or re-injected) by March, this year rose to 42 per cent.

Corroborating the DPR data, AfriPERA, an Energy and Infrastructure Policy research organisation, said Nigeria lost an average of N875 billion ($2.5 billion) between March, last year and March, this year from gas flaring.

The company’s Chief Executive Officer, Mr. Chinedu Onyeizu, said: “Since the 1950s, Nigeria has been burning off its natural gas at flare points and, despite efforts by successive administrations to curtail the wastage, the country loses an estimated $2.5 billion yearly to gas flaring as well as the unattended impact of negative externalities associated to gas flaring.’’

Also, the Oil Producers Trade Section (OPTS) Chairman, Paul McGrath, explained that gas can provide steady, cost-effective and  affordable power to Nigerians.

He added that a shift to gas-fuelled power generation would represent significant savings opportunities over sources, such as diesel, which is more expensive than gas at $2.5/mmbtu.

Gas production, according to the DPR report, increased by 15.4per cent at 263.48billion cubic feet compared to the output in proceeding period of February, this year.

This translated to an average daily production of 8,499.58 million standard cubic feet of gas per day (mmscfd). Of the volume of gas supplied in March, last year, 155.01bcf of gas was commercialised, consisting of 40.35bcf, and 111.66bcf for the domestic and export markets.

The report indicated that 58.81 per cent of the average daily gas produced was commercialised, and the balance of 41.19 was re-injected, used as upstream fuel gas or flared recorded gas flaring.

The Senate, on April 18, this year, passed a new bill, which provides for a penalty against gas flaring and other malpractices in the oil and gas sector. Earlier, Associated Gas Re-Injection Act of 1979 checked sharp practices in the sector. Since then, there has been no review or amendment of the Act, despite its devastating effect on the host communities, until the bill was passed.

One of the highlights of the new Bill is that any licensee, who supplies inaccurate data to the DPR or to any other lawful authority will be liable, upon conviction, to a fine of N10 million or be committed to prison for a term of six months or both.

Other objectives of the Bill include ensuring that natural gas is not flared or vented in any oil and gas production operation, block or field, onshore or offshore, or any gas facility, which shall commence operations after the commencement of the Act.

The Bill also seeks to ensure that no operator establishes an oil and gas facility without first obtaining authorisation from the minister for the design, commissioning and production phases. The Bill comprises 22 sections, including sections on punishment for the supply of inaccurate data, the gas flaring penalty fee, powers of the minister to make regulations, as well as a repeal of the Associated Gas Re-injection Act 1979.

Sponsor of the Bill, Senator Bassey Albert, said: “The approval of the long-awaited legislation on gas flaring after 40 years is one of the best parting gifts, the Eighth Senate could possibly offer Nigerians at this time.”

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